For most of its life as an institutional-quality investment class, infrastructure has been viewed as a source of stable cash flow, inflation protection and diversification. It provided downside protection for a portfolio but was rarely considered a means to significantly increase returns. Today, however, it appears we are at the forefront of a sea change; one that takes a portion of infrastructure out of the defensive-allocation bucket and puts it squarely into the growth-allocation bucket.
According to a recent S&P Global report, institutional investors are increasing allocations to the asset class to capture this growth, particularly where it relates to AI and energy. Some are reducing their debt allocation to make room, while others are reducing their private equity allocation. But nearly all are trying to find room for more infrastructure.
A look at the numbers illustrates what this shift in focus has done for infrastructure private equity funds out raising cap
